Monday, November 19, 2012

Two More Obama-Backed Green Companies in Trouble

One of the reasons government should not be picking winners in the private sector is they are not as good as the market-place in selecting viable companies. Obama's "green energy" program has wasted many federal dollars and the count goes way beyond the infamous Solyndra.

The latest green companies in trouble are two foreign outfits which received a combined $84,000,000 of our money in the form of Energy Department tax credits. The companies have announced layoffs.

One of the companies, German-owned SolarWorld, was integral in the fight for tariffs against the importation of Chinese photovoltaic solar panels. The other, Chinese company SunTech, blamed those tariffs for its own layoffs.

Both companies benefited from the Energy Department’s stimulus-funded Advanced Energy Manufacturing (48C) Tax Credit. The 48C credit is worth up to 30% of the cost of manufacturing qualifying green energy projects.

SolarWorld received a credit worth $82 million, while SunTech’s was worth $2.1 million.

Both companies announced this week that they will shed some employees. SolarWorld, which announced a 47% revenue decline in the third quarter, blamed a potential 37 layoffs at its Oregon plant on “illegal” Chinese trade practices.

SunTech said the U.S. International Trade Commission’s 35.95% tariff on Chinese solar panels was partially responsible for the 50 impending layoffs at its Arizona production facilities.

While heavy Chinese subsidies do reduce the cost of solar panels from that country, Heritage’s Derek Scissors warned against replicating those policies in testimony before the Senate Energy and Natural Resources Committee in June.

“The U.S. boasts a far better energy and environmental record than China,” Scissors explained, “and moving in China’s direction would be very risky.”